§ 312. Consideration for Franchise: Franchise and volumetric rate fees.

A.

In consideration for the rights and privileges enjoyed under this franchise, Grantee agrees to pay the City, as a franchise fee, a sum equal to three percent (3%) of Grantee's gross cash receipts from the transportation, distribution or sale of natural gas for domestic, commercial or industrial consumption within the corporate limits of the City of Tulsa. All sums due from Grantee shall be in lieu of all other franchise, license, or occupation taxes or fees, which may be levied or attempted to be levied on Grantee by the City

B.

Beginning November 1, 2015 and continuing through and including October 31, 2020 the franchise fee provided in Subsection 312.A shall be adjusted and Grantee shall pay the City a sum equal to three and five one-hundredths percent (3.05%) of its gross cash receipts from the transportation, distribution or sale of natural gas for domestic, commercial, and industrial consumption within the City. Beginning November 1, 2020 the franchise fee provided in Subsection 312.A shall be adjusted and Grantee shall pay the City a sum equal to three and one-tenth percent (3.10%) of its gross cash receipts from the transportation, distribution or sale of natural gas for domestic, commercial, and industrial consumption within the City.

C.

For the purpose of determining Grantee's franchise fee for transport gas, Grantee shall pay the City a Volumetric Rate fee, which shall be the sum equal to the then-current Volumetric Rate multiplied by the number of Dth of transport gas transported or distributed through Grantee's facilities within the corporate limits of the City by Grantee or by any third-party to transport customers for consumption within the City.

D.

In the event a customer of Grantee does not pay a monthly bill from Grantee in full, Grantee shall prorate its payments of remissions to the City for sums due on that particular bill so that the amount actually paid by the customer to Grantee on the bill is distributed to Grantee for the natural gas commodity and transportation or distribution service and to the City for sums due on the bill in proportion to the percentage of the total bill actually paid by the customer. In the event Grantee actually collects any outstanding amounts due on a past due, unpaid or partially paid monthly bill to a customer, then Grantee shall pay Grantor its proportionate share of sums due to the City on such bill.

E.

All sums due from Grantee under Section 312 above shall be payable monthly on or before the 25th day of each month for the preceding calendar month, which sums shall be in lieu of all other franchise, license, or occupation taxes or fees, which may be levied or attempted to be levied on Grantee by the City.

F.

Grantee shall have the right to seek from the City a waiver by the City of the payment of the Volumetric Rate fee due under this franchise as follows:

1.

The Volumetric Rate fee may be waived by the City only on a case-by-case basis as to specific transport customers and only when the specific transport customer meets all of the criteria for the waiver specified in this Subsection 312.F; and

2.

To seek the waiver, Grantee shall file an application for the waiver with the Director of Finance on a form to be provided by the Director of Finance; and

3.

Documentary evidence shall be attached to the application as required by the Director of Finance or as deemed necessary by Grantee; and

4.

The Director of Finance shall review and investigate the application and advise the Grantee in writing of the Finance Director's proposed recommendation thereon within fifteen (15) business days after the filing of the application. After advising Grantee of the proposed recommendation, the Finance Director shall make a final recommendation on the application no later than twenty (20) business days after issuing the Finance Director's proposed recommendation, unless Grantee otherwise requests, with the final recommendation to be filed with the City Clerk of City and mailed to Grantee; provided, as part of the review and investigation process, the Director of Finance may request additional information or documents from Grantee as reasonably deemed necessary for Finance Director's evaluation of and recommendation on the application. When such a request is made, the Grantee shall reasonably cooperate and comply with such request and upon the failure of the Grantee to so reasonably cooperate or comply, the Finance Director may delay the processing of the recommendation until such cooperation or compliance is given; provided further, the Grantee may extend the time lines set forth in this paragraph 312.F.4; and

5.

At the same time the Finance Director's recommendation is filed with the City Clerk under paragraph 312.F.4 above, the Director shall notify Grantee of the date of a proposed public hearing before the governing body on the application, which hearing shall be held within fifteen (15) business days after the recommendation of the Director of Finance is filed with the City Clerk, as provided for by paragraph 312.F.4 above. The governing body of the City shall then hold the public hearing to determine whether the waiver application shall be approved or disapproved; and

6.

At the public hearing provided for in paragraph 312.F.5 above, the governing body shall review and consider the application for a waiver of the Volumetric Rate fee for Grantee in regard to transport gas delivered to the transport customer mentioned in the application and may hear additional evidence and arguments for or against the application from the Finance Director, Grantee, and/or others and shall then determine whether or not all of the following criteria have been established by Grantee:

a.

That the transport customer has access to a lawful, economically feasible alternative through interstate commerce for the transportation of an adequate supply of natural gas to the transport customer by way of interstate gas pipelines owned and/or operated by an interstate pipeline company (the "alternative interstate gas transportation service"); and

b.

That Grantee has not played any role whatever in obtaining the alternative interstate gas transportation service for the transport customer; and

c.

That the alternative interstate gas transportation service would be provided to the transport customer by the interstate pipeline company at a cost less than the combined cost of Grantee's transportation fee plus the Volumetric Rate fee that Grantee would pay to City under this Ordinance for natural gas or transport gas provided or delivered to the transport customer; and

d.

That due to the factors listed under subparagraphs 312.F.6.a and c above, the Grantee would lose the transport customer's business unless the Volumetric Rate fee due under this Ordinance is waived by the City; and

e.

That due to the factors listed in subparagraphs 312.F.6.a, c and d above, the City would lose all sums due and payable to it under this Ordinance by Grantee for natural gas or transport gas provided or delivered to the transport customer unless the Volumetric Rate fee due under this Ordinance is waived by the City; and

f.

That due to the factors listed in subparagraph 312.F.6.e above and/or other material factors, the granting of a waiver of the Volumetric Rate fee for Grantee in regard to Transport Gas delivered to the Transport Customer is in the best interests of the City.

7.

Following the hearing and determination required by paragraphs 312.F.5 and 312.F.6 above, the governing body of City shall either approve or disapprove the application for a waiver. If all criteria set forth above in subparagraphs 312.F.6.a through f, inclusive, have been established by Grantee, then the governing body shall approve the waiver application; but otherwise the application shall be denied. If the application is denied, the governing body shall make specific findings of fact and conclusions of law based on such criteria. The final decision of the governing body on the waiver application, including the findings of fact and conclusions of law for a denial, shall be reduced to writing by the City Clerk and signed by the presiding officer of the governing body within ten (10) days of the date of the decision by the governing body, and immediately upon such signature by the presiding officer, the City Clerk shall mail a copy of the written decision to Grantee.

8.

A waiver of the Volumetric Rate fee approved under this section shall be retroactive to the date of the filing of the application for waiver by Grantee, and the date of such filing shall be considered to be the effective date of the waiver for all purposes of this franchise.

9.

A waiver of the Volumetric Rate fee approved hereunder shall be valid for a term of one (1) year, after which it shall lapse unless the Grantee seeks, and the governing body approves, an extension of the waiver for an additional one-year period in accordance with the terms of this Subsection 312.F.

10.

Any denial by the governing body of City of an application for a waiver of the Volumetric Rate fee under this Subsection 312.F may be appealed to the district court by Grantee as provided for in Title 12 Oklahoma Statutes, Section 951.

(Ord. No. 22415, § 1, 5-19-2011)